A Michigan HOA lost its lawsuit because it never took the vote its own bylaws required
A Michigan HOA lost its lawsuit because it never took the vote its own bylaws required
2026-09-12 · Michigan · Courts
What happened. The Michigan Court of Appeals affirmed on 22 July 2026 that a homeowners association lacked authority to bring its lawsuit at all, because its own bylaws required a two-thirds vote of the members before the association could incur the expense. Homeowners Association of Northville Colony Estates Subdivisions 3, 4 & 5 v Schurig, No. 375262, Wayne Circuit Court — unpublished per curiam, panel of Maldonado, P.J., Riordan and Young.1
The provision that decided it
Article XII, section 2 of the bylaws required a two-thirds vote of members, on 14 days' written notice, for “nonoperating expenditures” over $750. The panel held that litigation costs are such an expenditure. Without the vote, the suit was prohibited.
The court affirmed on that alternate ground and did not reach the merits — neither whether the structure violated the approval covenant, nor whether “suitability” and “harmony” standards are unconstitutionally vague.
The dispute underneath
In summer 2023 the defendants built a large detached structure with stone walls, permanent gas and electric service, a fire pit, a television, a water feature and a gazebo — without prior approval. They sought approval retroactively, after completion. The board refused on 21 July 2023, describing it as “materially different in scale and aesthetics from anything else… in the subdivision.”
On the association's own account of the facts, that is close to the paradigm case for enforcement. It never got argued.
The guardrail the panel built in, and it matters
The holding is not that every legal bill needs a membership vote. In footnote 10 the court said routine recurring legal work — tax-season advice, and “litigation for other matters such as the collection of delinquent assessments” — arguably is not subject to voter approval.
The rule as the panel framed it reaches unusual, non-recurring nonoperating expenditures. Assessment collection is the association's ordinary business. A one-off covenant-enforcement action against a gazebo is not.
That line is workable but it is a line, and nobody knows exactly where it sits. Which is the practical problem.
What this means for a Michigan board's next enforcement action
- Read your spending clause before you read your covenant. Most Michigan HOA bylaws contain a dollar cap on board spending without member approval, frequently set decades ago at a number that no longer means anything — $500, $750, $1,000. A single deposition costs more than all three.
- Decide whether the action is recurring business or a one-off. If there is any doubt, take the vote. A membership vote costs a mailing and fourteen days; losing on authority costs the whole case and the other side's fees.
- Document the authority in the resolution, with the notice date and the tally. The defect here was provable from the association's own records — or from their absence.
- Consider amending the cap. A clause written when a lawyer cost $60 an hour is not a governance control any more; it is a trap that fires once, at the worst moment.
This is now a pattern, not an isolated result
Michigan associations are losing on their own paperwork with some regularity:
- Carnegie Woods Property Owners Association v Czajka, No. 371756 (17 November 2025) — attorney fees denied because the bylaws provided for “damages” and did not specifically authorise “attorney fees,” and because the association never pleaded a breach-of-contract count on the deed restrictions.
- Woodside Meadows Condominium Association v Parker, Nos. 364582 and 364583 (12 February 2025) — a foreclosure lost after a bench trial where the court found the association's records “were not trustworthy” and its practices “deceptive.”
Against that, Farmington Square Condominium Association v Mitan, No. 366946 (11 August 2025), is the clean win: the association's manager could authorise filing the suit under the management agreement and the bylaws, no separate board vote was required, and the association recovered $24,086.10 in fees.
The difference between Northville Colony and Farmington Square is not the merits. It is what the documents said about who could spend the money.
What to watch next
Whether a published decision picks up the footnote 10 distinction. Until one does, Michigan boards are working from an unpublished opinion that tells them a category exists without telling them its boundaries — and the cheap answer to that uncertainty is to take the vote.
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